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From Uber's Q2/2022 report: Revenue 6854 Cost of Revenue 4026 Operations and Support 574 Sales and Marketing
by tyingq 4y ago
From Uber's Q2/2022 report:
Revenue 6854
Cost of Revenue 4026
Operations and Support 574
Sales and Marketing 1263
Research and Development 587
General and Administrative 632
Depreciation & Amortization 254
Total Costs 7336
- fishtoaster 4y agoI wonder (and am too lazy too try to find out) what portion of sales and marketing is driver-focused. One could maybe argue (as the grandparent did) that they should be spending less on rider marketing, but marketing to get drivers in the door seems pretty important. Dunno what their driver churn rate is, but keeping the pool of drivers large is critical for their service.
- frankfrankfrank 4y agoFrom what I’ve come to understand you are right on the money. All these “sharing economy” models rely heavily on churn and burn like many other less than solid business models like MLM. I would love to see the breakdown of drivers and their immigration status, because from what I can gather, what is happening here is not any different than in the past of America’s history where the whole business model relies on the exploitation of “immigrant” labor that knows no better and is easily exploited, aka their unrealized labor value is converted into profit, or better states, benefits and riches for the executives.
- bushbaba 4y agoI wouldn’t assume immigrants “knows no better”. More likely if they don’t have a better opportunity available. Especially if they are not on a visa.
- jelling 4y agoBingo. Andrew Chen, formerly of Uber, says exactly that in his excellent new book The Cold Start problem. The driver side is the hard side of the market and must be constantly tended.
- redisman 4y agoInteresting because the taxi business had all that figured out already. It was a profitable business and drivers stuck around for decades. Does Uber have too much overhead to ever be profitable?
- airstrike 4y agoDidn't drive stick around because they dropped thousands on medallions?
- mattzito 4y agoDepends on the city/locale. In NYC most drivers don’t own their medallions, they drive shifts for someone else’s medallion. In fact I’ve had a lot of conversations with Uber and taxi drivers who started as taxi drivers, switched to Uber when the bonuses were lucrative, and then some of them switched back because they liked the predictability of a fixed shift and not being ordered around by a machine. Others felt exactly the opposite.
- ceras 4y agoThe taxi industry had it figured out only on a smaller scale. Rideshare reaches more people and rides than taxis did. In most of America, taxis were never a serious option outside of niche use cases like getting a ride from an airport. Even in NYC, where street hailing is possible, that only ever really worked in Manhattan (and not even all of Manhattan); and medallion caps meant driver supply could never fully meet rider demand, unlike for rideshare, so getting drivers wasn't a realistic problem. Rideshare expanded the reach of taxi-like services to more regions, people, and use cases. It's now viable to travel without renting a car in many US cities - you can see this by how rideshare affected rental car companies. That's what makes the rideshare business hard: the places where they didn't have existing competition, because that's where the matching is harder and the economics not as easy. It's a similar story for food delivery: GrubHub/Seamless operated in core areas of cities like NYC for many years (since the 90s in NYC, I think). Uber Eats brings that service to far more places, and that's where the challenge comes from in that business.
- mjevans 4y agoSlash Sales and Marketing by 50% and they'd be profitable.
- underwater 4y agoSales and marketing affect revenues, you know.
- tomrod 4y agoTypically not enough to offset 50% of budget once the brand is known.
- endisneigh 4y agobased off what?
- mjevans 4y agoAt this point who hasn't heard of Uber? They only need some occasional reminders that might be targeted at the few people that haven't used or heard of friends or family using an Uber before.
- lordnacho 4y agoCouldn't you say the same for Coca Cola? Yet I'm fairly sure that maintenance budget is fairly big.
- treis 4y agoCoke is somewhat of an impulse purchase. At least it needs to be in your mind to buy it at the grocery store. Conversely, I'm not going to take an Uber ride tomorrow because they showed me an ad today. When I need to get somewhere I'll look at my options and choose the best. So long as Uber meets the minimum level of me being aware of it then theyre good.
- pid-1 4y agoWhat does Cost of Revenue means?
- deleted 4y ago[deleted]
- deleted 4y ago[deleted]
- tyingq 4y agoMostly the payments to drivers.
- oneoff786 4y agoThe payments to the drivers not including all those other ones hidden away in other promotions
- ta7777788 4y ago
- Izkata 4y ago> The term cost of revenue refers to the total cost of manufacturing and delivering a product or service to consumers. [0] It sounds like "developing the core product" falls entirely under this bucket, so with what others are saying about what falls under other buckets is right, then the one that looks most cuttable to me is actually "Research and Development". That sounds like the "experimental new stuff that may go nowhere" bucket, and if it's eliminated it would also put them just above break-even. Maybe they could focus on improving profits for their core product for a while before bringing that back. Maybe there is necessary stuff included in it though, which I guess means that wouldn't be an option. [0] https://www.investopedia.com/terms/c/cost-of-revenue.asp https://www.investopedia.com/terms/c/cost-of-revenue.asp
- spookthesunset 4y agoAll tech companies put most of their engineering under “research and development”. It lets you capitalize your expenses and smear them out over many years.
- kristjansson 4y agoSales and marketing should be labeled price discrimination. It’s all incentives to match driver earnings and rider costs to respective minima (maxima).
- tyingq 4y agoFyi, should say Q1/22, the report from March/22.